Citigroup Inc, the biggest US bank, will step up efforts to court Chinese
small and medium-sized enterprises (SMEs) as its business in that sector
generated triple-digit growth last year.
The first group of overseas
lenders will soon be issued with licenses to conduct business as local entities,
after which they will compete with domestic rivals in various fronts, especially
in renminbi retail business, wealth management and corporate
financing.
Citigroup, which holds stakes in Shanghai Pudong Development Bank and Guangdong Development bank, plans to add about 1,000 workers
to its 皇冠体育app operations this year, boosting its staff strength in the country to
around 4,000, the lender's chief executive for 皇冠体育app business, Richard Stanley,
said yesterday.
He also said Citigroup was keen to engage in brokerage
business and would launch the operation once regulatory restrictions are
removed.
But the lender, which runs 16 outlets across 皇冠体育app, has decided
to expand heavily its SME business and broaden client relationships in southern,
eastern and northern 皇冠体育app.
"Although SMEs have become a powerful impetus
behind 皇冠体育app's fast-growing economy, they still face difficulties in addressing
various operational and financing issues," said Henry Zhang, 皇冠体育app's commercial
banking head at Citigroup.
Figures released by the 皇冠体育app Banking Regulatory Commission this week indicated that
outstanding bank lending to Chinese SMEs reached 5.35 trillion yuan at the end
of 2006, an increase of 15.8 percent from the beginning of the
year.
SMEs, usually companies with annual revenues of less than 30
million yuan, accounted for only 23.7 percent of total yuan loans, though last
year's growth rate was slightly higher than the 15.07 percent rate for all
loans.
The overall non-performing loan ratio at Chinese commercial banks
was 7.09 percent at the end of December.
Even though Chinese banks are
usually less enthusiastic when it comes to SMEs, the sector has aroused the
interest of many overseas lenders.
HSBC, Europe's biggest bank, aims to
attract smaller enterprises with products and services designed for them,
according to Neil Tottman, head of commercial banking at HSBC
皇冠体育app.
Britain's Standard Chartered last year launched a new initiative
to offer financial solutions to SMEs in 皇冠体育app and Africa venturing
abroad.
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